January 19th, 2008
How much for a video-friendly Internet?
I complain a lot about the monopoly ISPs in this space, but these are hard times for them.
Despite their dominance of cellular, despite their phone monopolies, and their duopolies on Internet service, shares of AT&T and Verizon have barely budged in the last year.
As for Comcast, despite its ability to sell a “triple play” of phone, Internet and cable, for $150-200/month, it’s been a horror show — the stock is down 42% in the last year and one big investor wants the head of CEO Bert Roberts.
Chieftain Capital, which owns 2% of the company, calls its performance a “Comcastrophe.” John Shapiro of Chieftain wants it to stop managing for growth, and start managing for profit.
What this indicates is that, despite their financial problems, the conflict between these major ISPs and their users will continue.
Here’s my position. If you give me 10 Mbps of Internet service, without blocks to any Internet protocol, I don’t need your phone network, nor do I need your TV service. Give me the bits and software can do it all.
Let the Internet industry build a marketplace where we pay a fair price for Torrent-delivered programming, where we can pay for only what we watch, and it’s worth money to us.
But is it worth enough so that Comcast, or AT&T, can fulfill their big promises to Wall Street? Perhaps not, they think.
That’s why they’re pushing deep packet inspections, to control content at the center. That’s why they’re pushing so hard against net neutrality. Only by controlling what we do with the resource can they maximize their profits.
Then consider this. If anyone else — say Google — can deliver this bandwidth to me I’m cutting you off, without a dime. In a heartbeat.
Will the government protect the duopoly indefinitely? Will you be able to prevent advances in technology from ever reaching the public, so that you can keep charging $50/month for what looks increasingly like a crippled “Internet” service?
Wouldn’t it be better for you to negotiate a price with me now?
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Dana Blankenhorn has been a business journalist for 30 years, a tech freelancer since 1983. You can follow Dana on Twitter. See his full profile and disclosure of his industry affiliations.
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| 01/19/08
